Lower Mortgage Credit Availability in August


The Mortgage Credit Availability Index was 116.1 in August 2014. It went down by 0.3 percentage points from the previous month. In July it was 116.4.
The Index is compiled by the Mortgage Bankers Association. It was introduced in March 2012. Its initial level was 100. Decreases in the Index like the one which occurred in August indicate a tightening of the credit standards. Increases indicated loosening of these standards.

The Mortgage Credit Availability Index has been following an upward trend since October 2012 despite occasional drops. The dip which occurred in August 2014 is the first one since March of this year. At the same time, the July level of 116.4 was the highest since the Index was introduced in 2012. It went up from 115.8 in June 2014. The increase in the Index in July was primarily due to the rise in availability of jumbo loans from private lenders.

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The Chief Economist of the Mortgage Bankers Association explained that tightening in mortgage credit availability occurred only in some segments. In others, there was a notable loosening.

During the month, lenders introduced new home loan programs and this prevented the Index from experiencing a sharper decline. One of them was the FHA 203 (k) program for home improvement. This program enables home buyers to include the cost of renovating their new house in the principal amount of the mortgage loan which they take out. Other newly introduced closing programs were the one-time-close programs. They are designed to finance new construction.

At the same time, the volume of mortgage applications dropped down slightly during the final week of August. The Market Composite Index, which measures the changes in this volume, went down by 0.2% from the previous week on a seasonally adjusted basis. The volume of applications for home purchase loans dropped down by 2% from the week before on seasonally adjusted basis.



Christian Calvin mortgage Christian is a contributing writer for Mortgage.info. He is a graduate from the University of Tennessee with a degree in Communications and a concentration in Broadcasting. Christian has served as vice-president for a privately-held company for more than 20 years. Additionally, he has also applied his writing and business knowledge to various websites with a focus on business and sports news . . . both of which are passions. Christian enjoys playing golf and spending time with his family and friends.

Contact: christian@mortgage.info

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